A qui tam relator's detailed description of an alleged fraudulent scheme that does not identify a single false claim actually submitted to the government is not sufficient under the heightened pleading requirement of Rule 9(b), according to the Eleventh Circuit's recent opinion in United States ex rel. Clausen v. Laboratory Corporation of America. 2002 U.S. App. LEXIS 8899 (May 9, 2002).

Clausen involved allegations by a competitor that LabCorp engaged in six so-called schemes involving duplicative and unnecessary lab tests that led it to submit false claims through the intermediary. The relator, although permitted to amend his complaint twice, failed to identify any specific claims submitted or identify the dates on which those claims were presented to the government.

On this basis, the District Court dismissed the relator's second amended complaint for failure to comply with Rule 9(b) of the Federal Rules of Civil Procedure, which requires fraud to be pled with particularity. See 198 F.R.D. 560 (N.D. Ga. 2000).

On appeal, the Court flatly rejected the relator's contention that Rule 9(b) is inapplicable to the False Claims Act ("FCA"), noting that it is self-evident that the Act is a fraud statute for purposes of Rule 9 (b). On the question of whether the relator's description of LabCorp's internal testing policies and procedures was sufficient to satisfy Rule 9(b), the Court stated that the particularity requirement "does not permit a False Claims Act plaintiff merely to describe a private scheme in detail but then to allege simply and without any stated reason for his belief that claims requesting illegal payments must have been submitted, were likely submitted or should have been submitted to the Government."

Although the Court conceded that the relator's allegations might raise questions about LabCorp's internal policies and procedures, "nowhere in the blur of facts and documents assembled by Clausen regarding six alleged testing schemes can one find any allegation stated with particularity, of a false claim actually being submitted to the Government."

Finally, the Court noted in a footnote that Rule 9(b) serves two equally strong purposes:

(1) providing a defendant with sufficient information to formulate a defense; and

(2) protecting defendants from frivolous suits: "When a plaintiff does not specifically plead the minimum elements of their allegation, it enables them to learn the complaint's bare essentials through discovery and may needlessly harm a defendants' goodwill and reputation by bringing a suit that is, at best, missing some of the core underpinnings, and, at worst, are baseless allegations used to extract settlements."